During the last student loan update, I committed to paying an extra $180/mo above the minimum payment in order to have my loans paid off before turning 40!
I am now one year closer to 40 and I’ve decided to get slightly more aggressive to get this gorilla off my back! Starting next month, March 2020, I will pay an additional $40/mo above what I currently pay.
Using a basic loan pay off calculator, I am now on track to get these suckers paid off 3 months ahead of schedule. There is just one small problem.
I don’t earn enough to cover the extra payment!
Let me explain. I have a bank account dedicated to the payment of these student loans. This account is fed directly from my paycheck. At the current moment, I have it set it up so the account gets just enough to cover the bare minimum payment.
The rest of the money comes from miscellaneous sources
Have you ever heard that automating your finances is one of the best ways to meet your longterm financial goals? Here it is in action.
I get a small bonus from work at the end of the year. Unfortunately, my employer doesn’t allow us to change our direct deposit information for the bonus. So the student loan bank account got a larger influx of money than it would have gotten otherwise.
And listen, I meant to transfer the money over to my main bank account so I can have better control of it. But truth be told, I did not even have the energy to find my password to get into this account. I don’t even have a working debit card for this account. The only way I track what goes in and out of that account is through Personal Capital (which I check every single day). The account now holds enough to cover the premium that I want to pay above the minimum for almost an entire year.
I set out to pay off my student loans before the age of 40. I structured my monthly payments so that I would hit that goal on my birthday month in 2023. Even though “Done By 40” sounds so much better than “Done By 39”, I will gladly make that exchange. By increasing my monthly payment by a measly $40/mo, I can shave off 3 months from this loan’s life. This exercise got me excited and I am looking for ways to build on this momentum. Stay tuned!
I’d love to hear if you have any suggestions to get this paid down faster!